Abstract

References (35)

Citations (6)

Using the URL or DOI link below will
ensure access to this page indefinitely

Based on your IP address, your paper is being delivered by:

New York, USA

Processing request.

Illinois, USA

Processing request.

Brussels, Belgium

Processing request.

Seoul, Korea

Processing request.

California, USA

Processing request.

If you have any problems downloading this paper,please click on another Download Location above, or view our FAQFile name: SSRN-id1919772. ; Size: 233K

You will receive a perfect bound, 8.5 x 11 inch, black and white printed copy of this PDF document with a glossy color cover. Currently shipping to U.S. addresses only. Your order will ship within 3 business days. For more details, view our FAQ.

Quantity:Total Price = $9.99 plus shipping (U.S. Only)

If you have any problems with this purchase, please contact us for assistance by email: Support@SSRN.com or by phone: 877-SSRNHelp (877 777 6435) in the United States, or +1 585 442 8170 outside of the United States. We are open Monday through Friday between the hours of 8:30AM and 6:00PM, United States Eastern.

Two influential papers in the tax avoidance literature (Desai and Dharmapala 2006 and Desai et al. 2007) argue that tax avoidance can be used to facilitate managerial rent extraction from shareholders. Even though many subsequent papers have asserted a relation between tax avoidance and rent extraction, there is little empirical evidence to support that assertion. The most direct large sample empirical evidence in support of this theory comes from Russia, which has a much different regulatory and corporate governance environment than the United States, but subsequent studies relying on this theory focus on US firms. I test for large sample evidence that tax avoidance is associated with economically significant managerial rent extraction from shareholders in the US. I am unable to provide evidence that tax avoidance is related to managerial rent extraction on average. I conclude that researchers should exercise care when making predictions that assume a relation between rent extraction and tax avoidance by carefully considering whether this theory is appropriate for the firms in their sample.